ORLANDO, Fla. (FNS) -- Tomato growers in Florida and other states are considering filing dumping charges with the International Trade Commission against Canadian hydroponic farmers.
Reggie Brown, executive vice president of the Florida Tomato Growers Exchange, says a still-developing coalition of tomato industry trade groups has been discussing the issue.
"There certainly is interest [in a possible case] on the part of tomato producers, primarily greenhouse producers in the U.S. who are suffering the most dire consequences from what appears to be relatively cheap imports coming in from Canada," he said.
As for the effect of the alleged practices on supermarkets, officials point out it's important to take a "big-picture" point of view. Such predatory activity can limit alternatives by forcing U.S. producers out of business.
That leaves both the supermarket with fewer sources and less price competition, said industry officials.
And consumers shouldn't necessarily be thanking the Canadian growers for less expensive tomatoes, Brown said.
"That would assume wholesale prices have a direct relationship with retail prices. A number of studies indicate that's not the case," he said.
This latest incident closely resembles one that occurred four years ago, when domestic growers charged Mexican companies with selling tomatoes in the U.S. market at less than production cost. The two sides eventually negotiated an agreement prohibiting Mexican producers from selling product to U.S. brokers for less than $5.98 a box.
Now, the threat is coming from north of the border, growers here say. Figures from the University of Florida, Gainesville, show tomato imports from Canada have increased 680% over the past five years. In 1999, they totaled $121 million -- a relatively small slice of the $1 billion U.S. tomato market but a piece of business that definitely concerns growers here.
"The accusation is the product is being marketed in the U.S. at substantially below the cost of production. As a result, a number of greenhouse producers in the U.S. are in fairly serious economic condition," Brown said, adding that Canadian imports are impacting not only greenhouse operations.
"Any tomato product coming into the U.S. that's sold at unfair prices is not in the interest of the tomato industry in this country. We're certainly not an industry that is going to be passive when people come into our market and operate with unfair trade practices," he said.
According to the FTGE, Florida tomato growers lost $115 million last year when a bumper crop depressed prices. To cover costs, growers needed $7.50 a box. Instead, they saw prices range from $5 to $8. There's growing concern more small growers will be driven out of business, though Brown said at this point there's no particular timetable for filing an anti-dumping case.
"There is an ongoing effort to determine the merits of the case," Brown said. "At the point the group feels the merits are substantial, the case will follow."
Danny Dempster, president of the Ottawa, Ontario-based Canadian Produce Marketing Association, told the Tampa Tribune the dumping allegations are "something that is being discussed. Everybody is saying we need to find a way to get a better price for our product."
John Van Sickle, an agricultural economist at the University of Florida, explained any successful anti-dumping case must first establish that foreign producers are selling the product for less than fair market value, as well as selling the product in the export market for less than the cost of production.
"There have been occurrences when, if you look at the data on the price of the hydroponic products, it looks as though they were selling the product for less than the cost of production," said Van Sickle, who specializes in marketing and international trade.
"The second factor to look at is whether there has been any injury suffered by the industry. There you've got to look at what kind of impact it has had on our producers," he said.
"Can you quantify impact from the imports? I can't tell you what they've looked at so far. I've got some data of my own, and my suspicion is there are at least periods where you can show it has had an impact on returns to the U.S. growers," he added.
If the coalition does file a case, Van Sickle noted the matter won't be a quickly corrected. The process requires investigation, numerous hearings, and internal deliberation by the ITC -- and it could take as long as 18 months for a decision to come down.